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13 June 2012, Gateway House

Iran tests India’s policy

Apart from bilateral ties, also at play at the India-U.S. Strategic dialogue is the difficult triangulation in India’s relations with the U.S. and Iran. It does not serve India to get enmeshed in the U.S-Iran confrontation. Instead, the relationship must develop on the basis of realpolitik and mutual interest.

Professor, School of Public and Environmental Affairs, Indiana University

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India will have to walk a tightrope at the India-U.S. Strategic Dialogue starting in Washington D.C. on June 13. The pivot of this balance will be India’s relations with Iran at a time when, according to the spokesperson for the Ministry of External Affairs, the Strategic Dialogue reflects the vastness of the India-U.S. relationship and the breadth of engagement between the two countries.

During a visit to New Delhi in May 2012, U.S. Secretary of State Hillary Clinton had publicly stated that India should do more to restrict its oil off-take from Iran; she said sufficient oil was available in the market to make this possible. The U.S. administration has heightened its determination to ensure that its unilateral sanctions on Iran’s oil exports are universally observed. This has raised the bar on the U.S.’s expectations from India.

At the same time, according to a Wall Street Journal report in February this year, India is turning out to be “the mullah’s last best friend.” In the words of the newspaper, the “world’s most notorious theocracy” has found a friend in “an unlikely candidate: the world’s biggest democracy.”

This reflects the recent conflicting and difficult triangulation in India’s relations with the United States and Iran. Have we reached a tipping point in balancing our multiple bilateral relations?

On the one hand, India must strengthen its “strategic global partnership” with the U.S. in the context of its pivotal role in the Indo-Pacific ocean region; we have to also build on the bilateral civil nuclear cooperation agreement, and focus on the growing defence relationship between the two countries—all these provide the basis for a long-term relationship.

On the other hand, Iran poses for us a number of challenges in the short and medium term. The extent to which our historic and religious ties with Iran form the basis of our relations will always remain important. Iran and India today share common concerns on the ongoing developments in Pakistan, the possible post-2014 scenario in Afghanistan, its criticality to our access to Central Asia for our exports, and for its hydrocarbon resources. Recent discussions on activating the North-South Transport Corridor to Russia and the development and linking of Chahbahar port with the Zaranj-Delaram road into Afghanistan hold great promise.

India has already reduced its crude oil imports from Iran from 23-24 million tonnes a year to about 15 million tonnes by the end of March 2012, within a rising total off-take of oil and gas. In line with previous UN sanctions, we have also significantly reduced our exports of petroleum products to Iran, by roughly $40 billion, in the last two years. But the issue of India’s response to unilateral U.S. sanctions on Iran goes far beyond the question of the availability of energy and its negative effects on our growth. It has a lot to do with India’s West Asia policy, its relations with the U.S. and the West, and its international standing as an emerging global player.

The U.S. and the European Union will further strengthen their sanctions on Iran by July 1, in pursuit of their goal of ensuring that Iran gives up its uranium enrichment programme and rolls back its nuclear ambitions. These sanctions are bound to further affect our oil imports from Iran and would bring some Indian companies and banks, particularly those being used for alternative rupee trade arrangements, into the net of U.S. sanctions.

One the eve of S.M. Krishna’s visit to the India-U.S. Strategic Dialogue, the U.S. announced a waiver to India and a few other countries, in line with their own law. Not giving the waiver would, of course, have been the best way to provoke Indian public opinion at a time when the U.S.’s relations with Pakistan are increasingly tenuous.

To complicate matters further, alongside its vexed triangulation with the U.S. and Iran, India simultaneously finds itself caught between two other policy triangles: with a Shia Iran and a messianic Israel; and with a Sunni Gulf Cooperation Council (GCC) and a Shia Iran. India has close and dynamic relations with each of these players, and could be severely affected by—but not in a position to influence—their actions in the evolving scenario.

If we have indeed reached a tipping point in balancing our bilateral relations between the U.S. and Iran, we may have also reached a similar point in the triangulation of our relations between Israel and Iran, and between the GCC countries and Iran. It is interesting that we share a common goal with the U.S., Israel and Saudi Arabia—of stopping Iran’s nuclear ambitions. The Riyadh Declaration during Prime Minister Manmohan Singh’s visit to Saudi Arabia in 2010 calls upon Iran to clarify its position and stay within the four corners of the Nuclear Non-proliferation Treaty.

Our strong defence relationship with Israel has now consolidated and is an important strut to our defence acquisition programme; there is little possibility of scaling it down. In the onslaught of mutual threats between Iran and Israel, India has once again become gratuitously involved, with alleged Iranian complicity in the New Delhi terror attack on the Israeli diplomat in February this year, much as it had with the attack by the Lashkar-e-Taiba on the Jewish Chabad House in Mumbai in November 2008. India’s position is precarious, with Israel’s Prime Minister Netanyahu determined to ramp up the pressure for a military attack on Iran’s nuclear facilities before it reaches the “immunity zone” by September/October.

Similarly, with the GCC—Saudi Arabia, Bahrain, Qatar, UAE and Oman—our ambivalent posture towards Iran is needlessly causing misgivings in the ongoing Saudi-Iranian confrontation in West Asia, with its sectarian underpinnings. We need to take cognisance of the GCC’s sensitivities on Iranian President Ahmedinejad’s provocative visit to the disputed island of Abu Musa; Iran’s threats to close the Hormuz Straits in case of an Israeli attack; and its continuing work on nuclear enrichment. Yet it does not serve us to get enmeshed in their confrontation lest it colour our own polity.

Our relations with the GCC now go beyond the 38% of our crude requirements that they supply.  We need to nurture this two-way relationship, which has acquired economic ballast in the last decade comprising our diaspora, two-way investments in industry and information and communications technology, remittances and energy. With U.S. pressure to reduce crude imports from Iran, we need to work for clarity on whether Saudi Arabia will readily make up the shortfall, or consider whether we should use the opportunity to diversify our sources. With its production of crude slowly rising we need to re-engage with Iraq, which provided 50% of our crude requirements until 1990.

Any destabilisation in the Gulf provoked by developments in Syria, Israel or Iran will directly impact the 6 million Indians who live and work in the region, our crude supplies and remittances.

What then is India’s national interest in the evolving scenario?  Is there any role we can play which will reduce tensions and further our interest as well? Can we be part of the solution without harming our own interests?

We are not, neither do we wish to be, part of the ongoing hostility between Iran and the U.S., or Iran’s hostility with Israel or the GCC. We have forward-looking and mutually beneficial relations with each of these players, but this can hardly be made a test of fealty or a zero-sum game. The reduction of our crude imports from Iran has been primarily dictated by market conditions and our future policy will have to depend on similar considerations as apply to Iraq.

Iran’s long-term importance for India’s energy needs, as Pakistan’s neighbour and a major player in the region, cannot be underestimated. The balance of power in the Middle East is changing in the aftermath of the democracy protests—the Arab Spring—and Iran’s profile has enhanced. Our relationship must develop on the basis of realpolitik and mutual interest divorced from the romanticism or emotion of the past. A far greater effort is required on the trade side, where our exports account for only $2.6 billion out of a total trade turnover of about $18 billion. Similarly the case for increased investment in transportation infrastructure in Iran and hydrocarbons in India is manifest.

Even the United States is pursuing a “dual approach,” coupling sanctions with waivers to enable export of food grains to Iran. The P5+1 Group (the U.S., Britain, China, France, Russia, plus Germany) has held two rounds of talks so far without a breakthrough on curtailing Iran’s uranium enrichment. The next round in Moscow on June 18-19 will continue to spin out the issue to contain Israel’s unbridled aggressive posture at least till the U.S. Presidential elections in November 2012. Whether the U.S. and Iran will come to a “grand bargain” on their long-standing confrontation remains moot. In this background India would have to ensure that it does not burn its bridges with Iran or with any of the other players.

Finally, is there any role India can play which will reduce tensions and further our interest as well? Learned U.S. policy-watchers have suggested that India play a “bridging role” in the ongoing discussions between Iran and the P5+1 Group, and that by not doing this we have let down the U.S. India may not be averse to such a role, having acted in a similar manner in other situations. A lot will depend on the acquiescence of both parties to the talks and on ensuring that we are seen as an “honest broker” by both sides.

Considering the complexities of the equations between all the players involved, possibly the best course for India will be to keep its head down and all the balls in play.

Ambassador Rajendra Abhyankar, a former Indian diplomat, is Chairman, Kunzru Centre for Defence Studies and Research, Pune. 

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